Why does Apple reduce the price of the iPhone?

Apple iPhone are these days becoming hype in india, a reader asked us why apple decreases the smartphone price after the launch? Or more simply, why smartphone companies decreases price of device after the launch? For example, Samsung galaxy S5 was launched at Rs.55,000 and currently its price is Rs. 29,000 in India.

So now let’s come back to point, read below paras to find out the reason behind price decrement.

Apple reduces the prices, Because the longer you make a product the cheaper it is to make it. A lot of the initial cost is in the beginning. The more of them you make and the longer you make the same product everything from manufacturing costs to distribution costs less. In addition, once you’ve recouped your R&D your costs drop even more.

So Apple could keep charging the same prices right about when the market slows down and conceivably make higher margins, or they could drop the price while maintaining margins and increase sales, making more money. This ends up making them more money in the long run and is one of the reasons why Apple can still sell millions of iPhones the quarter before they launch a new iPhone.